Inflation's lingering impact on grocery prices and wages in the United States and Spain

Despite a slowdown in headline inflation, consumers in both the United States and Spain continue to face high grocery bills. Economists describe a "rocket and feather" effect: prices jump quickly when costs rise but fall only gradually when costs recede. In the U.S., food inflation surged 11.4% in 2022 and, although price growth has moderated, household food costs remain near record levels. Private‑label sales hit a record $282.8 billion last year as shoppers turn to store brands.

In Spain, wages have not kept pace with rising living costs. Average negotiated salaries rose about 5% in 2024 to €2,386 gross per month, while the consumer price index was roughly 2.8%, eroding real purchasing power by about four percentage points since the pandemic. The disparity is especially acute in sectors hit by energy and housing price spikes, leaving many workers struggling to afford essentials.